Chevron Signs Up Japanese LNG Customer

Chevron has begun marketing gas from a proposed expansion of its A$43 billion Gorgon project in Australia and has signed another customer for its nearby Wheatstone development amid a surge in natural gas demand in Japan following last year’s earthquake.

Reuters

“We’re out there surveying interest,” Chevron Australia Chief Executive Roy Krzywosinski told Deal Journal Australia on the sidelines of a conference in Adelaide.

“The LNG demand picture has changed significantly post-Fukushima,” Mr. Krzywosinski said, referring to the Japanese nuclear plant disaster that followed a devastating earthquake and tsunami in March 2011. “It just keeps going up and up.” He added that South Korea has significant quantities of uncontracted LNG demand to meet over the next three or four years.

Chevron earlier Sunday said at a press conference it and joint venture partners Apache Corp and Kuwait’s Kufpec have signed a preliminary agreement to sell up to 1 million metric tons of liquefied natural gas, or LNG, a year from the US$29 billion Wheatstone project in Western Australia state to Japan’s Tohoku Electric Power.

San Ramon, Calif.-based Chevron–the second biggest oil company in the U.S. behind Exxon Mobil–is investing heavily in Asia-Pacific such as through the construction of the Gorgon and Wheatstone projects to tap a projected surge in demand for cleaner-burning fuels.

Japan, the world’s third-largest energy consumer after China and the U.S., is ramping up natural gas use due to a shortfall in nuclear power output following the earthquake and tsunami last year.

Nuclear power provided 30% of Japan’s electricity generation before the earthquake and now all of the country’s reactors are offline. The country’s natural gas consumption surged 27% in the fiscal year ended March 31, helping it avoid major power shortages last summer.

About Japan Real Time

Japan Real Time is a newsy, concise guide to what works, what doesn’t and why in the one-time poster child for Asian development, as it struggles to keep pace with faster-growing neighbors while competing with Europe for Michelin-rated restaurants. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, the site provides an inside track on business, politics and lifestyle in Japan as it comes to terms with being overtaken by China as the world’s second-biggest economy. You can contact the editors at japanrealtime@wsj.com